Keppel Land Markets First Dollar Bond Since 1995; Asia CDS Rises

Dec. 4 (Bloomberg) -- Keppel Land Ltd. is marketing dollar-denominated notes, its first public bond sale in the U.S.
currency since 1995, as yield premiums for Asian issuers headed
for the biggest annual drop in three years. Asia debt risk rose.

Keppel Land, a Singaporean property developer, is marketing
$250 million of seven-year notes at about 235 basis points more
than similar-maturity Treasuries as soon as today, Teri Liew,
deputy general manager for corporate communications at parent
Keppel Corp., said in an e-mailed response to questions. The
cost of insuring corporate and sovereign bonds from non-payment
in Asia advanced one basis point to 112.5 basis points, after
falling to a 17-month low yesterday, prices from Royal Bank of
Scotland Group Plc and CMA show.

Borrowers in the Asia-Pacific region have sold almost $215
billion of dollar bonds this year, almost double total issuance
in 2011 and the most on record, according to data compiled by
Bloomberg. Investors drove down average premiums on Asian dollar
bonds to 269 basis points as of yesterday, from 374 basis points
at the start of the year, according to JPMorgan Chase & Co.
indexes.

“In general the market is still constructive,” said
Annisa Lee, a Hong Kong-based credit analyst at Nomura Holdings
Inc. “But deals will tend to slow down as we get to the end of
the year.”

Keppel Land sold $200 million of five-year debt in December
1995 at a yield of 1.25 percent, according to data compiled by
Bloomberg. Citic Pacific Ltd. is marketing an increase of as
much as $250 million to its existing January 2023 notes today, a
person with knowledge of the matter said, asking not to be
identified because the terms aren’t set.

Busiest Week

Shui On Land Ltd. raised $500 million from a sale of 10.125
percent perpetual bonds yesterday, according to data compiled by
Bloomberg, after $5.65 billion of offerings last week, the
busiest week since the period ended Oct. 12.

Global debt funds took in a net $5.17 billion in the week
ended Nov. 28, according to research firm EPFR Global.

The Markit iTraxx Asia index of 40 investment-grade
borrowers outside Japan slid to 109.2 yesterday, its lowest
since July last year, according to CMA, which is owned by
McGraw-Hill Cos. and compiles prices quoted by dealers in the
privately negotiated market.

The Markit iTraxx Japan index was little changed at 167
basis points as of 9:17 a.m. in Tokyo, Deutsche Bank AG prices
show. The measure fell to 166.2 last week, its lowest since
April 12, according to CMA. The Markit iTraxx Australia advanced
half a basis point to 131 as of 11:04 a.m. in Sydney, according
to Westpac Banking Corp. prices.

The indexes are benchmarks for insuring bonds against
default and traders use them to speculate on credit quality. A
drop signals improving perceptions of creditworthiness, while an
increase suggests the opposite.

The swap contracts pay the buyer face value in exchange for
the underlying securities if a borrower fails to meet its debt
agreements.